6. XYZ Inc., an all equity company, has expected earnings over the next year of $2/share (E1= 2). The company is expected to maintain an earnings retention rate of 40% (b = 0.4), i.e., 60% of learnings are expected to be paid out as dividends every year. The company has an equity beta of 2,the risk-free rate is 2% (rf = 2%), and the market risk premium is 4% (rM-rf = 4%). a. What is the required return on XYZ's equity? b. If the growth rate in earnings is expected to be 4% in perpetuity (i) What is the value of the stock? (ii) What is the expected return over the next year? c. If the current price of the stock is $16/share, what is the implied growth rate of earnings(and dividends)?